Cronyism in California?
U.S. Sen. Diane Feinstein’s husband Richard Blum won the first-phase construction contract for California’s high-speed rail.
That’s from the California Political Review, and the rest can be found here.
Tag Archives: California
CA Cities Consider Seizing Mortgages
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Arnold Ahlert comments on a coercive plan to restructure failing mortgages by seizing the property through eminent domain, forcing bondholders to accept payment at subdued prices, and reselling the homes to the mortgage holders at their current low value.
The scheme is nothing more than crony capitalist thuggery aided and abetted by spendthrift government officials. It will no doubt be applauded by morally suspect homeowners, who will be alleviated of living with the consequences of their own freely-made decisions.
You can find the blog post here.
A Big Government Is a Bankrupt Government
Jon Gabriel from FreedomWorks recently wrote the following article about how the local government of Stockton, California, went on a spending spree during the housing bubble. This created a big unsustainable government and led to a bankrupt government. The local government borrowed $300 million to build, based on the false nation of wealth and prosperity created by the housing bubble. Today, Stockton is bankrupt.
More foolish than the politicians’ building boom was the evermore lavish (and theoretically unending) benefits for public employees. City employees only had to work one month then retire for the city to cover their and their spouse’s insurance for the rest of their lives. After Stockton dug themselves into endless debt, they did the only thing they could, becoming the largest city in America to file for bankruptcy. This week, a federal judge ruled that Stockton was eligible for bankruptcy protection and can develop a plan to reorganize its debt. The biggest part of that debt is the nearly $1 billion the city owes to the state’s employee pension plan, CalPERS.
The biggest question in the Stockton bankruptcy isn’t “how could this happen?” but “who’s next?”San Bernadino stopped paying creditors and CalPERS last year and is requesting bankruptcy protection, while Fresno is considering a similar fate. Outside of the Golden State, Miami is under an SEC investigation for making struggling taxpayers fund a $600 million baseball park and Harrisburg, Pa. might request bankruptcy for a second time.
Promises Of Charity Won Tax Breaks for Tech Companies
Justine Sharrock at Buzzfeed writes about a case in San Francisco where companies promised to fund local charities in order to receive special tax breaks from the city:
Twitter and six other San Francisco tech companies are set to receive sizable tax breaks from the city in exchange for non-binding promises to make charitable contributions totaling, in many cases, just tens of thousands of dollars — along with promoted tweets for local groups.
The Great California Government Union Swindle
Ivan Osorio at the Open Market blog writes about a series of Bloomberg posts on a particular interest group in California that is benefiting at taxpayers’ expense: the government unions.
Are government employees overpaid? A six-part Bloomberg report answers that question with a resounding “Yes.” It also singles out one state as the biggest spender by far: California. This isn’t a case of a handful of isolated incidents. The team of Bloomberg reporters found a pattern of fiscal irresponsibility characterized by:
- Lack of control in overtime pay and unused vacation time payouts;
- Lack of coordination among state agencies which in one instance launched a costly salary bidding war for qualified personnel; and
- Compensation for pension fund managers that bears little relation to performance.
Cows Flee California Seeking a Better Economic Climate
Bill Frezza writes a humorous article at RealClearMarkets about the various dairy programs the government supports, some in order to aid well-connected farmers:
To ensure the public good, the federal government and some states set a minimum legal price on milk. Selling milk for less can actually land you in jail. While this doesn’t sound like such a good deal for consumers or innovative producers, it’s great for well-connected dairy farmers and the politicians they support.
California’s Crony Capitalism Problem
Steven Greenhut, the vice president of journalism for the Franklin Center for Government and Public Integrity, discusses the huge cronyism problem that California is facing:
In much of the country, the mere mention of the name, Jerry Brown, signifies the otherworldly nature of California politics. Many people in other states have come up to me and said something to this effect: “You Californians are so weird that, in tough economic times, you re-elected that retread from the 1970s.”
Putting brakes on ride-sharing apps
Michael Cabanatuan at the SF Gate writes about state regulators in California who are stopping local entrepreneurs from providing a ride-sharing service:
State regulators have issued cease-and-desist orders against two more firms that bill themselves as high-tech alternatives to the way taxi companies usually operate.
The latest orders were issued in August by the California Public Utilities Commission and assert that the companies – SideCar and Lyft – lack the required charter party carrier permits that make sure drivers are properly licensed, screened and insured to carry commercial passengers.
As we’ve seen with the Uber story, these regulators may be acting in the best interests of the taxi industry instead of the public.
Taxpayers may bear burden of eminent domain scheme
Angelica Malik at the Daily Caller writes about a program in California to use eminent domain to take homes with underwater mortgages, an idea that could be rife with cronyism and cost the taxpayers dearly:
“This would be a wealth transfer away from private investors who are going to be taking substantial losses, and then other private investors who didn’t have to bear any cost are going to be able to buy these new mortgages that have been written down to 2012 prices and are much more likely to be repaid,” Randazzo added.
Eminent Domain Is Bad Ploy for Underwater Mortgages
In a new interpretation of eminent domain, Bloomberg reporter Steven Greenhut writes about how one California county’s believes they can solve their housing crisis through seizing mortgages.
“Officials in San Bernardino County, California, believe they have figured out a clever way to solve the county’s, and possibly the nation’s, housing problems.
“Detailed by a Cornell University professor, and pitched by influential San Francisco investors who stand to make a fortune from it, this new idea is based on one of the oldest concepts: the taking of other people’s property.”
